Risk tolerance and strategic vision driving AI adoption for service personalization: an upper echelon perspective

Purpose Drawing on upper echelon theory, this study investigates how the psychological characteristics of the top management team (TMT) drive the strategic choice to adopt AI-enabled market intelligence to achieve service personalization. It positions leadership not as reactive to market pressures, but as a proactive force in organizational technological transformation. Design/methodology/approach A multi-source, time-lagged survey design was employed. Data were collected from 151 tourism and hospitality firms in Pakistan, with separate surveys administered to first-line managers, TMT members and customers. The data were aggregated to the firm level and analyzed using structural equation modeling in SmartPLS 4. Findings The results confirm that a TMT’s risk tolerance and strategic vision are primary catalysts for achieving service personalization. Furthermore, AI-enabled market intelligence mediates this relationship, and competitive intensity amplifies the effect of TMT characteristics on the adoption of AI-enabled market intelligence. Practical implications The findings offer managers a clear leadership development and strategic roadmap: cultivating a TMT with high risk tolerance and a strong strategic vision is essential for navigating digital transformation and building a sustainable competitive advantage through personalized service. Originality/value This research presents a novel extension of upper echelon theory by demonstrating that in high-uncertainty contexts, directly measurable psychological traits of leaders are potent drivers of strategic change. It clarifies the “black box” between TMT characteristics and organizational outcomes by identifying AI-enabled market intelligence as a tool for achieving strategic differentiation.